Auxilium Pharmaceuticals (AUXL)

(c) General Stock Option Information

The following tables summarize stock option activity for the three years ended December 31, 2007:

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Of the 286,004 options cancelled during 2007, 279,377 represented unvested options forfeited with an average exercise price of $9.46 and 6,627 represented vested options cancelled with a weighted average exercise price of $12.22. The aggregate intrinsic value of options outstanding and of exercisable options as of December 31, 2007 was $74,457,000 and $26,270,000, respectively. These aggregate intrinsic values represent the total pretax intrinsic value, based on the Company’s stock closing price of $29.99 as of December 31, 2007, that would have been received by the option holders had all option holders exercised their options as of that date.

The weighted-average grant date fair value of the options issued in 2007, 2006 and 2005 was $8.30, $5.84 and $3.40, respectively. The total fair value of options vested in 2007, 2006 and 2005 was $3,663,000, $1,143,000 and $3,144,000, respectively. The total intrinsic value of options exercised in 2007, 2006 and 2005 was $9,119,000, $901,000 and $355,000, respectively. As of December 31, 2007, the weighted average remaining contractual life of outstanding options and of exercisable options was 8.27 and 7.10 years, respectively.

The total number of in-the-money options exercisable as of December 31, 2007 was 1,153,052.

(c) General Stock Option Information

During the nine months ended September 30, 2007, the Company granted 1,126,940 standard non-qualified stock options and 85,000 performance-based non-qualified stock options to employees to purchase shares of the Company’s common stock pursuant to the 2004 Plan. The options expire ten years from date of grant and their exercise prices represent the closing price of the common stock of the Company on the respective dates that the options were granted. The standard non-qualified stock options vest ratably over four years at one year intervals from the grant date, assuming continued employment of the grantee. The performance-based options were awarded to certain officers and accrued on September 19, 2007 with the Compensation Committee determination that the performance metric (resumption of the phase III trials for XIAFLEX™ for the treatment of Dupuytren’s contracture in the fourth quarter of 2007) had been achieved. Each performance-based option has an exercise price of $13.16 and vests in three equal annual installments on September 19, 2008, 2009 and 2010, assuming the continued employment of the grantee (with automatic vesting upon a change of control of the Company).

The following tables summarize stock option activity for the nine month period ended September 30, 2007:

During the three and nine month periods ended September 30, 2007, the weighted-average grant-date fair value of options granted was $9.84 and $7.81, the total intrinsic value of options exercised was $1,666,000 and $6,194,000, and the total fair value of options vested was $736,000 and $3,163,000, respectively.

The aggregate intrinsic values in the preceding table represent the total pre-tax intrinsic value, based on the Company’s stock closing price of $21.08 as of September 30, 2007, that would have been received by the option holders had all option holders exercised their options as of that date. All 1,225,045 exercisable options as of September 30, 2007 were in-the-money.

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(c) General Stock Option Information

During the six months ended June 30, 2007, the Company granted 993,740 standard non-qualified stock options and 85,000 performance-based non-qualified stock options to employees to purchase shares of the Company’s common stock pursuant to the 2004 Plan. The options expire ten years from date of grant and their exercise prices represent the closing price of the common stock of the Company on the respective dates that the options were granted. The standard non-qualified stock options vest ratably over four years at one year intervals from the grant date, assuming continued employment of the grantee. The performance-based options were awarded to certain officers and will accrue, subject to vesting, to the grantee upon the Compensation Committee’s determination that the Company resumed the phase III trials for XIAFLEX™ (clostridial collagenase for injection), formerly referred to as AA4500, for the treatment of Dupuytren’s contracture in the fourth quarter of 2007. Each performance-based option has an exercise price of $13.16 and vests 33-1/3% on the one year anniversary of the Compensation Committee’s determination that the performance metric has been satisfied with the balance vesting in two equal annual installments thereafter, assuming the continued employment of the grantee (with automatic vesting upon a change of control of the Company).

The following tables summarize stock option activity for the six month period ended June 30, 2007:

During the three and six month periods ended June 30, 2007, the weighted-average grant-date fair value of options granted was $8.34 and $7.56, the total intrinsic value of options exercised was $406,000 and $4,529,000, and the total fair value of options vested was $1,951,000 and $2,444,000, respectively.

The aggregate intrinsic values in the preceding table represent the total pre-tax intrinsic value, based on the Company’s stock closing price of $15.94 as of June 30, 2007, that would have been received by the option holders had all option holders exercised their options as of that date. All 1,217,091 exercisable options as of June 30, 2007 were in-the-money.

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(c) General Stock Option Information

During the three months ended March 31, 2007, the Company granted 687,740 standard non-qualified stock options and 85,000 performance-based non-qualified stock options to employees to purchase shares of the Company’s common stock pursuant to the 2004 Plan. The options expire ten years from date of grant and their exercise prices represent the closing price of the common stock of the Company on the respective dates that the options were granted. The standard non-qualified stock options vest ratably over four years at one year intervals from the grant date, assuming continued employment of the grantee. The performance-based options were awarded to certain officers and will accrue, subject to vesting, to the grantee upon Compensation Committee’s determination that the Company resumed the phase III trials for AA4500 for the treatment of Dupuytren’s contracture in the fourth quarter of 2007. Each performance-based option has an exercise price of $13.16 and vests 33-1/3% on the one year anniversary of the Compensation Committee’s determination that the performance metric has been satisfied with the balance vesting in two equal annual instalments thereafter, assuming the continued employment of the grantee (with automatic vesting upon a change of control of the Company).

The following tables summarize stock option activity for the three month period ended March 31, 2007:

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During the three months ended March 31, 2007, the weighted-average grant-date fair value of options granted was $7.38, the total intrinsic value of options exercised was $4,122,175 and the total fair value of options vested was $493,667.

The aggregate intrinsic values in the preceding table represent the total pretax intrinsic value, based on the Company’s stock closing price of $14.68 as of March 31, 2007, that would have been received by the option holders had all option holders exercised their options as of that date. All 918,512 exercisable options as of March 31, 2007 were in-the-money.

(c) General Stock Option Information

The following table summarizes the status of options outstanding at March 31, 2006:

The aggregate intrinsic value in the preceding table represents the total pretax intrinsic value, based on the Company’s stock closing price of $7.93 as of March 31, 2006, that would have been received by the option holders had all option holders exercised their options as of that date. The total number of in-the-money options exercisable as of March 31, 2006 was 882,712.

During the three months ended March 31, 2006, the weighted-average grant-date fair value of options granted was $4.60, the total intrinsic value of options exercised was $81,000, and the total fair value of shares vested was $390,000.

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